Controlling stake of Lithuanian Kauno Elektrine sold to US Venture company

The management of Lithuania's Kauno Energija signed a final agreement on the sale of a controlling stake in thermo-power station Kauno Termofikacijos Elektrine, or KTE, majority of which is owned by Gazprom, to the U.S.-based Clement Power Venture, the Moscow Times said.

The deal was done despite
misgivings on the part of the Kaunas city municipality, Kauno Energija's main shareholder, as to the
actions of the heating company's management board, Baltic News Service
reported. The documents were signed and management decisions made during a
period when Kauno Energija chief and
Kaunas city Mayor Andrius Kupcinskas
was on vacation. He said on Monday that the positions of the city municipality
and company management differ. In his view, he said, company management should
have sought the main shareholder's views prior to making its decisions.

The agreements need to be approved
by shareholders, who will meet on this issue Aug. 17.

"After the documents are
signed [by Gazprom] there will be no
obstacle drawing the deal out, and this will make possible an inflow of
investment and a reduction of heating prices," KTE chief Antanas Pranculis
said. Kauno Energija management
approved last week changes to agreements with KTE that pave the way for selling the power station to a new
investor.

The company's shareholders will
take up the terms for Gazprom selling
off KTE shares, as well as those for
the cessation of obligations under a surety agreement, at their Friday meeting.
Only afterwards will Gazprom be able
to complete the sale of the controlling stake to Clement Power Venture.

Gazprom, along with Dujotekana and Clement Power Venture, acquired the Kaunas station from Kauno Energija in 2003 for about $40
million (EUR 32.5 million) and undertook the obligation to increase its
capacity to 80 megawatts with investments of more than $140 million (EUR 114
million).

Circular economy for modern growth: EU and the Baltics EU’s circular economy plans are aimed at efficient use of natural resources and raw materials, waste disposal, while fostering energy savings and reducing CO2. Adequate actions in the Baltic States would contribute to “closing the loop” of product lifecycles through greater recycling and re-use, while bringing benefits to environment, business and economic growth.